The independent review of the Federal Deposit Insurance Corp. (FDIC) workplace culture has cast doubt on the credibility of the agency’s chairman Martin Gruenberg to lead a cultural transformation.
The report released on Tuesday by law firm Cleary Gottlieb Steen & Hamilton describes “deeply unsettling exchanges” between Gruenberg and his subordinates.
Honestly I'm not sure that the toxic and illegal workplace practices could be tied directly to the failure of both Signature and First Republic (both had FDIC as primary regulator). Although the misconduct report indicates there were a lot of problems at FDIC's large bank…
— Joshua (@shuamp) May 8, 2024
In one instance as recently as last year Gruenberg reportedly held a 45-minute rant on bank failures where he threatened that he could “fire” or “reassign” anybody he wanted. Attendees described the meeting as “embarrassing and inappropriate.”
The report states that Gruenberg’s “reputation raises questions about the credibility of the leadership’s response to the crisis and the ‘moral authority’ to lead a cultural transformation.” It comes after the Wall Street Journal published an investigation last November outlining details of the agency’s workplace culture prompting the FDIC’s board to order the independent review.
FDIC, a government agency that protects bank customers from losing their deposits, fostered a toxic workplace rife with harassment and bullying that mostly targeted women or people from underrepresented groups, according to a new report. https://t.co/SK7aaI6FfS
— CBS Mornings (@CBSMornings) May 8, 2024
In response to the report Gruenberg posted an apology on the agency’s website on Tuesday. “To anyone who experienced sexual harassment or other misconduct at the FDIC I again want to express how very sorry I am” he said. “I also want to apologize for any shortcomings on my part. As Chairman I am ultimately responsible for everything that happens at our agency including our workplace culture.”
